The 27-year-old was cited for an alleged tip tackle on opposite number Andy Goode buta three-man panel decided that they could not be certain that the second-half incident was foul play because other players were involved.
"Whilst we found that the elements of a dangerous tackle were made out, after very careful analysis we could not be satisfied that the dynamics of the incident had not been caused, or contributed to, significantly by the involvement of other players from both teams," said the panel's chairman Jeremy Summers.
The news is a big boost for England boss Stuart Lancaster as he gets set to announce his EPS and Saxons squads later today.
Flood was England's starting 10 for all but the last of the autumn internationals when he missed the historic win over New Zealand with a toe injury.
Owen Farrell started that success against the world champions but the Saracens star hasn't had much game time at fly-half since he returned to club colours.
Gloucester's in-form Freddie Burns is also expected to be named in the EPS, with the 22-year-old having won his first cap against the Kiwis, but Flood's availability will be a weight off Lancaster's shoulders as his side look to build on last year's second-place finish.
The decision is also exactly what Leicester Tigers director of rugby Richard Cockerill wanted to hear ahead of a fortnight of crucial Heineken Cup action.
Leicester travel to the Ospreys this Sunday before hosting French giants Toulouse a week later, with the Tigers knowing that back-to-back wins would guarantee progression to the knockout stages of a competition they last won back in 2002.